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Innovation Governance for Value Capture -The Problem and a Proposed Simple Model-based Solution

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  • Pitelis, Christos
  • Panagopoulosi, Andreas

Abstract

We aim to model the "optimal" choice on internal versus external innovation for value capture of different-sized firms, in the context of multi-level bargaining. We find that size differentials are a major determinant for the choice in hand. We derive implications for "closed" versus "open" innovation approaches, and we discuss managerial practice, limitations and possible extensions.

Suggested Citation

  • Pitelis, Christos & Panagopoulosi, Andreas, 2009. "Innovation Governance for Value Capture -The Problem and a Proposed Simple Model-based Solution," Papers DYNREG42, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:dynreg42
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    References listed on IDEAS

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    1. Richard J. Rosen, 1991. "Research and Development with Asymmetric Firm Sizes," RAND Journal of Economics, The RAND Corporation, pages 411-429.
    2. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters,in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87 World Scientific Publishing Co. Pte. Ltd..
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    7. Richard J. Rosen, 1991. "Research and Development with Asymmetric Firm Sizes," RAND Journal of Economics, The RAND Corporation, pages 411-429.
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    13. Fariborz Damanpour, 1996. "Organizational Complexity and Innovation: Developing and Testing Multiple Contingency Models," Management Science, INFORMS, pages 693-716.
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    15. Lanjouw, Jean O & Schankerman, Mark, 2004. "Protecting Intellectual Property Rights: Are Small Firms Handicapped?," Journal of Law and Economics, University of Chicago Press, vol. 47(1), pages 45-74, April.
    16. James Bessen & Michael J. Meurer, 2005. "The Patent Litigation Explosion," Working Papers 0501, Research on Innovation.
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    Cited by:

    1. Pitelis, Christos, 2009. "Edith Penrose’s ‘The Theory of the Growth of the Firm’ Fifty Years Later," MPRA Paper 23180, University Library of Munich, Germany.
    2. Christos N. Pitelis & David J. Teece, 2010. "Cross-border market co-creation, dynamic capabilities and the entrepreneurial theory of the multinational enterprise," Industrial and Corporate Change, Oxford University Press, vol. 19(4), pages 1247-1270, August.

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    Keywords

    Innovation; Firm Size; Value Capture; Patent Portfolios;

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